Need to build 'leading cranes' as Vietnamese private enterprises

At the seminar “Vietnam’s Industry and Trade Sector - Restructuring for Sustainable Development” held on May 12, Dr. Nguyen Van Hoi, Director of the Institute for Industry and Trade Policy and Strategy (Ministry of Industry and Trade), shared: The most important achievement in the past 10 years is to develop the industry in both breadth and depth with a relatively fast growth rate of 8-9%/year.

All industries and industrial products have made important contributions to the economy. Industry has truly become the pillar of the economy, with the largest contribution to the national budget and GDP.

Over the past years, restructuring activities of the Industry and Trade sector have been carried out according to Decision No. 2146/QD-TTg dated December 1, 2014 of the Prime Minister.

“More importantly, industry has basically met the development of the domestic market, contributing to the total retail sales of goods and services in the country, creating fair competition with goods from other countries in the domestic market. Industry also makes an important contribution to exports, as 85% of the items exported come from the industrial sector,” said the leader of the Institute for Strategic Research on Industry and Trade Policy.

In 2022, import and export recorded many historical milestones when for the first time the total trade turnover exceeded 700 billion USD, along with a trade surplus of about 10 billion USD, many industries entered the "billion USD and tens of billion USD clubs".

According to Dr. Nguyen Van Hoi, although the export volume is relatively large, there are still potential risks because many items come from FDI enterprises. The added value or participation in Vietnam's export supply chain is relatively low, especially in terms of technology. When FDI enterprises enter Vietnam, they commit to supporting investment activities, but the rate is extremely low.

Therefore, the leader of the Institute for Industry and Trade Policy Strategy believes that it is necessary to develop more binding regulations on technology transfer and implementation of commitments. From 2022 to April 2023, the impact and decline of FDI enterprises are clearly visible, causing the country's exports to decrease. In the restructuring process, anything that is difficult or has not been achieved must be adjusted to suit all production and trade sectors.

Dr. To Hoai Nam, Permanent Vice President and General Secretary of the Vietnam Association of Small and Medium Enterprises, noted that restructuring is one of many ways to achieve the goal of industrialization and modernization of the country. The role of “leading crane” enterprises in the restructuring process is very important.

Recently, Vietnam has seen the emergence of many leading enterprises in the automobile, seafood, textile,... industries, mainly private enterprises (Photo: Thaco)

Mr. Nam emphasized that in recent years, many leading enterprises in the automobile, seafood, textile, etc. industries have appeared, mainly private enterprises, thanks to the resolution on private economic development.

“I believe that in the near future, if we can maintain this, there will be more businesses that play a leading role,” he said.

However, Dr. To Hoai Nam said that restructuring an industry in general and each individual enterprise in particular cannot be done by the Industry and Trade sector alone, but needs to be done synchronously.

In terms of thinking, business development thinking and industry development thinking must be flexible. The problem is that policy makers have not yet demonstrated the appropriateness, the mismatch between policy and reality and reality.

Dr. Nguyen Van Hoi agreed: In the development process, we must rely on the private economy and form a leading crane. Relying on the leading crane FDI is not feasible. We need to clearly recognize this to see that in the restructuring process, we need to build domestic private enterprises to truly become leading cranes that grasp science and technology to lead.

“My point of view is that we need to build leading cranes which are Vietnamese private enterprises - which can form joint ventures with foreign enterprises. Restructuring state-owned enterprises to bring about equal competition with other enterprises in the coming period” - Dr. Nguyen Van Hoi shared.

The Government issued Decision No. 165/QD-TTg dated February 28, 2023 approving the Project on restructuring the Industry and Trade sector for the period up to 2030. The Project aims to restructure the Industry and Trade sector to carry out economic restructuring, improve productivity, quality, added value and competitiveness; create new growth drivers associated with qualitative changes.

Specifically, the average growth rate of industrial added value will reach over 8.5%/year. The proportion of processing and manufacturing industry in GDP will reach about 30% by 2030. Maintain a trade surplus with export growth rate always higher than import and an average increase of about 6-8%/year; the average growth of total retail sales of goods and consumer service revenue will be about 13-13.5%/year.

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